Graduates dodging study debts by disappearing abroad; Dutch state lost €170 mil. so far

A growing number of former students are dodging their student loans by disappearing abroad. After five years of the student finance provider DUO being unable to reach them, the student debt expires due to the statute of limitations. To date, the Dutch state has lost out on €170 million euros due to tens of thousands of former students failing to repay their debts, AD reports.

The Cabinet is working on a bill to introduce a contact requirement for former students. Debtors will be required to provide their current contact details, or those of a third party, to DUO so that the agency can continue to collect payments.

Of the million former students with student debts, DUO was unable to reach 21,000 last year. As a result, the agency could not collect €170 million. At the end of 2018, there were 20,000 former students without a current residential address, with a total outstanding debt of €76.1 million. The Ministry of Education, Culture, and Science expects the number of people with high student debts abroad to continue increasing in the coming years, causing the state to lose out on more and more money.

The government doesn’t think that all former students abroad are deliberately dodging their debts. Some forget to report their new address, or think this will happen automatically when they register in a new place of residence. But this does not always happen, and if things go wrong, payment arrears accumulate quickly.

“It is therefore in the interest of both the debtor and the government that they remain contactable,” Education Minister Rianne Letschert said in her legislative proposal. The bill will require former students intending to travel abroad or move frequently to designate a contact person, like a friend or family member, who will have details about their whereabouts. The former student remains responsible for the debt.

The Minister also wants to extend the statute of limitations on these debts to ten years. “This prevents a debtor from repaying only a small portion of their student debt simply because they are residing abroad and are therefore unreachable for DUO,” writes Minister Letschert. She also wants to work with other countries to exchange student information.

The legislative proposal for amending student finance has not yet been submitted to parliament.